Landmark Business.com sale: “only” $2M
Monday, October 9th, 2006
The actual value of the landmark business.com sale was only $2M, not $7.5M.
Until recently, Business.com was considered the highest domain name sale ever at a reported $7.5M. (There have since been higher domain sales, pushing business.com down the list.)
But it turns out the $7.5M sale of Business.com wasn’t that much after all. It wasn’t a cash deal, and was for $7.5M in illiquid stock. We knew it wasn’t worth the full $7.5M, but we had no idea how much it was actually worth…until now. How much did the stock end up being worth? Only $2M, it turns out.
This is according to Jake Winebaum, founder of eCompanies. eCompanies was an internet incubator that started Business.com. In a recent article in Newsweek, Winebaum points out that $7.5M in stock in an inflated company isn’t $7.5M in cash. When the company refinanced in 2004 it redeemed the stock for $2.0M.